A Review of the Nigerian Energy Industry

Macondo settlements mostly correct, says audit

27 November 2014, News Wires – A third-party audit of the settlement programme related to the Macondo oil spill of 2010 found that the vast majority claims filed against BP were valid, giving a boost to the administrator of the payouts whom the UK supermajor tried to oust.

The audit, conducted by Chicago-based McGladrey, determined that the settlement programme correctly processed 99.5% of claims, concluding that the programme is “well-designed and appropriate”, according to the New Orleans Times-Picayune newspaper, which reviewed the audit.

bp bigBP has claimed that the programme is flawed and has resulted in payouts to fraudulent claims. The company, citing a conflict of interest, has tried to remove claims administrator Patrick Juneau but those efforts were stymied by Judge Carl Barbier, who is overseeing the BP case stemming from the deadly blowout and oil spill in the US Gulf of Mexico.

BP said it is currently reviewing the audit.

The supermajor is looking at a payout bill of some $3.7 billion for 53,512 submitted claims

The audit, which looked at 1852 of those claims – with a value of $741 million – found that 122 had calculation errors resulting in about $2.1 million in miscalculated awards, according to the Times-Picayune.

The error rate when extrapolated to the entire programme was about 0.5%, equating to about $17.5 million in calculation errors.

McGladrey auditors said an a filing that an error rate of less than 1% was “a significant accomplishment” given the complexity of the claims process.

“By any objective measure, these error rates are extremely low,” the newspaper quoted the report as saying.



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